Strategic Planning in the Small Business

Unit 2 HO 2-5 (continued)

Tools to Aid the Analysis of FinancialResources

The information contained on the firm's income statements

and balance sheets can be helpful data for evaluating the rel­

ative strength of the financial resources.

Table 2-2 Vavzdy Custom Jewlers

Compaative Balance Sheet

Current assets:

Cash

Accounts receivable (net)

Inventory

Prepaid expenses

Total current assets

Long-term assets:

Equipment, furniture &fixtures

Less accumulared depreciation

TOTAL ASSETS

Current liabilities:

Merchandise payable

Operating expenses payable

Interest payable

Income tax payable

Short-term notes payable

Total current liabilhies:

Long-term liabilities:

Notes payable

Total liabilities:

Owner's equity.

Common stock

Retained earnings

TOTAL LIABILITIES AND OWNER'S EQUITY

62 PartOne The Analysis Phase

Year 4

$ 41,300

98,400

73,800

8,000

$221,500

96,400

(57,400)

$260,500

$ 20,000

15,000

1,000

3,000

10,000

$ 49,000

40,000

$ 89,000

70,100

101,400

$260,500

Year 3

$ 41,906

83,300

77,000

7,000

$209,200

76,400

(37,800

$247,800

$ 19,000

14,400

1,600

12,000

20,000

$ 67,000

47,000

$114,000

70,100

63,700

$247,800

Year 2 Year I

$ 17,800 $ 16,200

64,000 48,600

96,500 70,200

8,000 9,000

$186,300 $144,000

46,400 46,400

(23,200) (11,600)

$209,500 $178,800

$ 31,000 $ 21,600

18,800 16,200

1,000 900

n 'v)0 3,000

32,000 52,000

$ 84,800 $ 93,700

27,000

...

$111,800 $ 93,700

70,100 70,100

27,600 15,000

$209,500 $178,800

205